Belgium: EIRO CAR on the Changing Business Landscape in the Electricity sector and Industrial Relations in Europe

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Although the Belgian electricity sector is confronted with the same challenges as other countries, namely liberalisation and the transition to using more renewable energy sources, the business landscape is only changing slowly with a still dominant position of the former incumbent Electrabel. Social dialogue in the sector has been hampered and got more diffused by the liberalisation, the effect of the still early-developments in renewable electricity is only very limited until now. However, at the macro-level, the issue of energy prices, security and renewable energy got at the forefront of political debates in the country to which also the social partners at the confederal level participated in a full manner.

1. General background information on the energy policy in your country and employment trends

1.1. Please explain briefly the main governmental strategies/action in relation to the electricity production and energy source mix. In your answer, please include information on the following aspects, where possible:

Is there an outspoken policy or plan in your country for any kind of change towards an increase or decrease of electricity production with any of the different sources (coal, oil, gas, hydro, eolic, sun, etc.)?

Which is the targeted energy mix for the future (see material provided)? How, in which subsequent steps, such targets are expected to be met?

Are investments in networks (new connections, upgrade) envisaged? To what extent? With which specific goals?

What is the Government stance and what are the ongoing/envisaged action towards generation of electricity from the different broad groups of sources: nuclear /fossile /renewable energy?

What are the recent employment trends in the different subsectors of power generation according to the different broad groups of sources: nuclear/fossile/renewable energy? Please indicate development since 2005 with reference to generation, disribution, and sale separately.

Belgium is a federal country and is divided into three regions: Flanders, Wallonia and Brussels-Capital. The regional governments are responsible for designing and implementing policies for energy efficiency, renewables, CHP, RUE, non-nuclear energy R&D and gas and electricity (< 70 kV) market regulation on the distribution level. The federal government is responsible for the gas and electricity regulation on the transport level, nuclear energy (including R&D, generation, waste… ) and other issues that need to be dealt with on a national level (e.g. large storage facilities and tariffication). Pressured by EU-regulation the electricity market has been liberalised in each region and unbundled in companies licensed to compete in production and retail and in dedicated companies for the distribution. The market is supervised by state agencies at federal (CREG) and regional level (VREG, Brugel and CwaPE). In practice, the Belgium electricity market has stayed largely concentrated, with the incumbents SPE and especially Electrabel playing a, although diminishing, still dominant role.

The last 5 years electricity policies have been focusing on the security of supply, the continued struggle to create a competitive market, mitigation of climate change and the promotion of sustainable energy (IEA, 2010). The governments have launched a series of initiatives to meet these policy objectives, among others at the Federal level:

The GEMIX expert group to examine the ideal energy mix in the medium and long term

Prospective studies to determine the future needs for electricity

Renewed work and advice by the regulatory body CREG on the pricing and competition

Spring of the Environment to find consensus on energy and climate policies.

Together with the regions the Federal government developed a national action plan on renewable energy. As part of this plan, the country wants to increase by own internal efforts the % of RES in the electricity production from 6 in 2010 to 20% in 2020. The plan contains a forecast on the mix of RES in electricity for the next 10 years (page 91-92).

A big point of debate stays the nuclear phase-out. In 2003 the Belgian parliament voted for a law that organised the phased stop of nuclear power use between 2015-2030 (if the electricity provision would not be threatened). However, discussion kept going on, whetherthis phasing-out would threaten the electricity supply. The new government shall very quickly have to make some key decisions on this matter. Related to this matter is a discussion on the so-called windfall profits the nuclear producers make with these installations of which the investment costs have been partly done by the state and of which the costs have been long time ago depreciated in the company accounts. The incumbents (Electrabel and SPE) are already paying a nuclear tax in this regard, but voices are raised in politics to increase this tax (although these taxes are disputed by the involved companies before the court).

The Belgian authorities recognise that the integration of the RES electricity in the existing network is an important challenge. Measures have been taken that the off-shore wind parks in the North Sea, which start to be operational, can be fully-integrated. Investments in so-called smart grids and intelligent networks to among others integrate the decentralised production of RES electricity are in a final phase of investigation. A point of debate in this regard is also the technology of ‘smart metering’, whereby doubts are raised about the costs of implementation.

Employment in the production or selling of green electricity can’t be separated in statistics from other employment figures. The main retailers sell both types of electricity. The same goes for the producers. Part of these producers are furthermore only very recently been growing and produce this RES electricity not always as a main activity, but as a secondary activity of their main activities (recycling and biomass or using the roof of their large production plants for solar panels).

1.2. Government policy for increase of the share of renewable resources according to the RES directive

Are any subsidies being granted for different types of RES for electricity providers? If yes, please provide briefly the details

Have subsidies for RES been cut recently? Was this a result of the crisis, of budget constraints, or the result of a policy revision (following a policy assessment, due to a disproportionate use of subsidies, etc.)? Please provide brief details.

Are there any other forms of support foreseen for promoting electricity generation of RES?

Please include any other aspects you consider to be worth mentioning regarding the state of play and the future prospects of RES in your country.

The green certificate system with a quota obligation is the main instrument to increase the share of renewable electricity generation in Belgium (for further details see the national action plan on renewable energy). The system is applied in all three regions, but the minimum prices and fines (for suppliers that do not meet the monthly obligation) differ per region. Other measures include fiscal or other types of investment subsidies.

The system of certificates is currently debated for mainly two cost factor reasons and this most strongly in Flanders:

The system has to be more flexible to the market as subsidies are sometimes not following the drop in investment costs;

The certificates have currently to be financed by the distribution companies. This resulted due to the success of especially solar energy in a strong increase of electricity prices. In theory the certificates have to be bought by the retailers to reach their quota of green energy. However, there is now more supply of such certificates than demand of the retailers to reach their quota. As a result, this market has collapsed and the minimum price has to be guaranteed by the distribution companies.

A revision is scheduled, whereby also pleas are made for a stronger harmonisation between the regional systems. The goal is to have on the one hand a flexible system that give incentives to the market, without over-financing and on the other hand create the necessary financial security for the possible investors.

The expectation is that the sector of RES electricity will have a boost in the coming years. State policies are also put in action to have this increase (as in the last years). This boost is not only planned and scheduled because of environmental targets, but also because it can help to reach other mid-term targets of the electricity policy:

Energy security when use of nuclear power is phased out;

More competition in the production, which would help the further marketisation of the electricity supply and should have a downward effect on prizes.

Nevertheless, all authorities are also convinced that these efforts have to be complemented with a series of policies and initiatives to increase energy efficiencies and savings.

1.3. Are there any studies and documents assessing the employment impact of energy policies and of prospective changes in the energy mix within the electricity sector? This could include, for instance,

Employment effects resulting from the unbundling of activities (production from distribution)

Employment effects (on quantity and quality of work) resulting from the possible shifts within the electricity production sector from traditional sources to RES

Employment effects from investments in infrastructure (renewal of grids, introduction of smart meter technology, district heating)

The need for retraining of workers or provision of new qualifications linked to the sector transformations

Possible spatial mobility of workers as a result of more decentralised production (linked both to new activities and to restructuring of existing ones)

Please include any other aspects you consider to be worth mentioning regarding prospective impacts on employment and industrial relations

In respect of the unbundling of the value chain as part of the electricity market liberalisation, one can conclude that the employment growth in sales and marketing departments have been compensated by cuts in the production due to technological innovations. Part of the new sales and marketing personnel was outsourced to call-center activities outside the sector. As a result employment figures decreased from around 20,000 in 1995 to approx. 15,000 in 2005.

A recent report by the High Council for Employment on green jobs and a report by the Flemish social and economic council (SERV) on renewable energy summarise the existing studies. For Belgium these studies are rare and referring also to the international studies these two reports conclude the following:

The existing calculations and forecasts are most of the time practicing a top-down approach, hereby not grasping employment in companies with other main activities; strong figures can only be collected by a bottom-up survey approach. In Belgium only one study has been conducted in this regard by the Walloon sector federation Edora. However, the study misses detail and representativeness.

In relation to renewable energy a lot of the studies focus only on the supply and construction of the installations, not on the production/maintenance itself. In this regard studies exist in Belgium by the employers’ federation of the technology sector Agoria.

Figures in international studies vary a lot and contradict each other; it is furthermore no coincidence that estimates by sector-related interest groups always have much higher figures.

Important is to take into account the substitution effects (employment destruction in classical electricity production) and the indirect negative employment effect by a possible rise in energy prices for the rest of the economy. In this regard simulations by the Federal planning bureau show that the scheduled climate policies will have only a possible positive employment effect as the possible green taxes are re-invested by the state in a labour cost decrease.

In relation to skills, it is expected that the RES boom will result in further shortages of finding engineers with correct qualifications.

1.4 To what extent are the social partners involved or consulted concerning the governmental energy policy, notably in relation to employment impacts? Has this happened on an ad-hoc basis or on a structural, permanent basis? Is there a special tripartite social dialogue body for such consultations? Did consultation take place at national level, at sector level, or at the initiative of individual companies? Please briefly provide details.

Historically, the national social partners (VBO-FEB and the 3 trade union confederations) have played an important role in the electricity policy of the country. The Control Committee for Electricity and Gas was an autonomous public body that monitored the electricity and gas sectors, and regulated the electricity and gas market. It was composed of representatives of the gas and electricity industries, trade unions and national and regional authorities, and it operated by consensus. The recommendations of the Control Committee for Electricity and Gas to producers and distributors of electricity and gas were not binding, but in fact they were always accepted since all of the committee’s members had reached a consensus to implement them. The Control Committee was also responsible for recommending electricity tariffs to the Government and for the enforcement of regulation.

After the liberalisation of the electricity market, the Control Committee was abolished and regulation of the market came into the hands of the federal and regional regulators (independent state agencies). However, the national social partners are still represented in the General board of the federal regulator CREG and they play still an important role in the recommendations of this CREG to the Federal government on energy policies. The current president of the CREG is a national secretary of the Chistian trade union ACV-CSC.

Besides this direct formal involvement, the social partners are also on a regular basis consulted on energy policies in other bodies and circles. As part of the Belgian neo-corporatist industrial relations system, they give on a continuous basis advices on energy policies in the existing bi-partite social and economic councils, which exist at the federal and regional level: Central Economic Council (Conseil Central de l’Économie/Centrale raad voor het bedrijfsleven, CCE/CRB) at the federal level; Social and Economic Council of Flanders (SERV) and Walloon Region Economic and Social Council (CESRW).

Employment is not the main issue in the current debates on electricity policy, prices and the effect on the competitiveness of the economy and the purchasing power of households is the main issue on which the social partners work today especially in the CREG.

On a more general level, social partners are involved in recommendations, studies, and initiatives to promote the greening of the economy. Positive employment effects are expected in this regard.

2. Composition, structure and employment trends for the different resources used for electricity production

2.1 Please give an overview of the current sectoral composition of electricity production in your country, by giving for each of these seven groups of energy sources, the NAME of the three largest producing, the NUMBER OF EMPLOYEES of these companies, and the public or private STATUS of the EMPLOYMENT RELATIONSHIP with their employees.

For all companies listed, as a summary, please indicate:

Total production and its distribution across different energy sources

Total employment and its distribution across different energy sources

Production plants and their respective energy source(s)

Electricity production

Electricity production with

TOP 3

PRODUCING COMPANIES

(the largest 3 in market share)

NUMBER OF EMPLOYEES

Reference year for the number of employees

Private/Public STATUS of WORKERS

FOSSIL FUELS

Electrabel

2966

2010

Private

SPE

940

2009

Private

E.ON

n.a.

NUCLEAR

Electrabel

HYDRO

SPE

Electrabel

SPW

WIND

SPE

Electrabel

Aspiravi

30

2010

Private

BIOMASS

Max Green*

Electrabel

Burgo Ardennes**

PHOTO-VOLTAIC

Zonnecentrale Limburg ***

Katoennatie**

Enfinity

73

2010

Private

Sources:Production: based on statistics the regional regulators produce on green certificates for installations. These statistics are based on production capacity and not actual production. Employment: annual accounts companies (social balance sheet)

Electrabel: 51% of the total employement (5815)

SPE: includes also the personnel of electricity provider activities (SPE-Luminus)

* Max Green is a joint venture of Electrabel with another company; the company itself has no personnel.

** Burgo Ardennes and Katoennatie are companies involved in other activities (respectively paper industry and logistics). They are so-called decentralised electricty producers: the core activity of the company is not producing electricity; the majority of the production is in other words mainly for own consumption; although they input their over-production into the electricity net; they receive in this regard also green energy certificates and subsidies from the government.

Zonnecentrale Limburg is a joint venture between a construction company and a local public invest company (originating from the reconversion of the coal mine industry)

Until 2008 the market share of Electrabel was almost 90% in the electricity production. By a swap of assets and shares, when EDF and Suez merged on the European level to GDF Suez, 15% of the nuclear production is now owned by SPE and also 10 to 15% of the fossil fuel production by E.On (Electrabel got in return production shares in Germany).

Certainly in terms of personnel it is safe to say, there are only two important production companies in Belgium and with Electrabel still definitely on number one.

The 3 players, mentioned in the case of solar energy, have only very recently installed their production facilities (Katoennatie in 2009 and 2010; Enfinitiy also 2/3 in 2010).

2.2 Please provide an overview of the current oganisation of electricity distribution in your country. Is there a single distributing company/body? Are there multiple companies? At national or territorial level?

Transmission is organised by one company namely ELIA, distribution is territorially organised by 27 distribution gird operators, which are governed by networks of local municipalities. However, the operational work of this distribution grid is outsourced/subcontracted to 4 net operators: Eandis (most of the Flemish region); Ores (large parts of the Walloon region), Sibelga (Brussels region) and Infrax (remaining parts).

2.3 Please indicate the NAME of the three largest distributing companies, the NUMBER OF EMPLOYEES of these companies, and the public or private STATUS of the EMPLOYMENT RELATIONSHIP with their employees.

Distribution companies

TOP 3

DISTRIBUTING COMPANIES

(the largest 3 in market share)

NUMBER OF EMPLOYEES

Reference year for the number of employees

Private/Public STATUS of WORKERS

Distribution GRID

Elia

1163

2010

Private

Eandis

4296

2010

Private

Ores

2374

2010

Private

The 3 companies are the main net operators.

2.4. Where there any significant developments/changes since 2008 for a specific company or source of electricity production in numbers of employees or in their public/private status? Was this due to the current economic crisis? Were there any instances of unbundling or mergers? With what consequences in terms of employment and industrial relations?

According to social security statistics, employment is growing in the sector after a period of stagnation. It is however not clear whether this growth is in the sector of production or retail. In the period after liberalisation the growth in sales employment of the retail sector was compensated by cuts in production personnel (triggered by technology-induced productivity increases). As investment in new green electricity plants is rising so is employment. However, no exact figures exist on this matter.

In any case, recent restructurings in the sector seem not to have resulted in collective dismissals. SPE-Luminus organised the further integration of the previous two companies in a project ‘One-Company’, which was accompanied by a collective agreement. Although some personnel had to change jobs or functions, it resulted not in a direct cut of jobs. The recent take-over by ENI – the Italian energy company – of Nuon Belgium (the 3th retailer in size) has not been accompanied by personnel cuts. This take-over took place in the summer of 2011.

3. Industrial relations in the electricity sector: Actors

3.1. Please provide details on the membership in the electricity sector and membership of the top 3 producing and distributing companies in employer’s organisation (see questions 2.1-2.3 above). Please provide information on the name of the trade unions organising in this subsector and the level of their membership, or otherwise provide overall data but please include indications on differences in membership densities across subsectors.

Trade union representation and Membership to employers’ organisation

FOSSIL FUELS

Electrabel

FEBEG

See remark below

SPE

FEBEG

E.ON

FEBEG

NUCLEAR

Electrabel

FEBEG

HYDRO

SPE

FEBEG

Electrabel

FEBEG

SPW

Public authority

WIND

SPE

FEBEG

Electrabel

FEBEG

Aspiravi

FEBEG

BIOMASS

Max Green*

Electrabel

FEBEG

Burgo Ardennes**

Not relevant

PHOTO-VOLTAIC

Zonnecentrale Limburg

Katoennatie

Not relevant

And in the distributing companies

Distribution GRID

companies

Elia

Synergrid

Eandis

Synergrid

Ores

Synergrid

No specific data are available on this matter. The union organisation runs by company boundaries, whereby the demarcation by production type plays no role. Unions present in the sector are:

ACV BIE: christian origin, the union is a collaboration of the blue-collar and white-collar sector federations since 2004 at the Flemish side; at the Walloon side the white-collars are still defended by CNE, the blue-collars by BIE.

Gazelco ACOD-CGSP: socialist origin.

ACLVB-CGSLB: liberal.

3.2 To what extent are employees in the different subsectors (fossil/nuclear/RES) covered by trade union representation? Has there been any impact of the crisis on trade union representation?

No specific data are available on this matter. The union organisation runs by company boundaries, whereby the demarcation by production type plays no role. Anyhow, Electrabel is still the dominant production player in almost all the production types. Unions are strongly established and embedded at the workplace in the company.

Although there has been no impact of the crisis, one can see that the small RES newcomers in the sector have sometimes difficulties to adapt to the industrial relations climate in the sector. The dismissal of a substitute union rep caused at Electrawinds an industrial conflict that only could be solved after mediation at sector level and after threats of collective action in february 2010 (De Morgen, 18/02/2010)

3.3 Have there been major reorganisations/splits/mergers of trade unions or employers organisations in the sector during the last five years?

No, although FEBEG – the employers’ organisation – has in August 2011 been confronted with the stopping of membership by Lampiris. Lampiris is an upcoming 100% green energy retailer, which has currently a market share of almost 2% in the electricity retail. Although the company in its accompanying press release states that it recognises the usefulness of a sector organisation, it is convinced that FEBEG is defending to much the rights of only the established big players (Electrabel and SPE). It announces to start working on an alternative employers’ organisation.

At the union side, the Christian union representing the energy workers, merged into a bigger sector federation, called Construction, Industrie and Energy (ACV-CSC BIE). However, the sector representation did not change.

3.4. Have new actors (trade unions or employers organisations) been founded in recent years, especially in the newly evolving RES industries? Or is the industry covered by established actors?

The IR field, which is strongly institutionalised, is covered by established actors (see previous point). However, the sector of renewable energy is also organised cross-sectoral (R&D, technological sub-industry, producers, …). These organisations are split-up by region. They play a role in debates on energy policy and are consulted in the development of industrial policy. ODE Flanders (ODE Vlaanderen, de Organisatie voor Duurzame Energie Vlaanderen) is the sector organisation for durable energy in the Flemish region. It is the umbrella organisation of a range of specific technology platforms, for example the Flemish Wind Energy Association (VWEA). The Walloon counterpart of ODE is EDORA.

3.5. Have the established sectoral actors (both trade unions and employer organisations) started any initiative to extend their representation to the new emerging parts of the sector? Please describe such initiatives and their results so far.

No.

On the employers’ side, it is important to know that companies are automatically by the Federal authorities assigned to a sector joint committee (here 326). As such, they and their personnel have as a consequence by law to follow the collective agreements and arrangements of this sector joint committee (as the agreements are as part of normal Belgian IR practive always extended to all employers of the sector).. One see as a result in this sector (as in any other sector) the urge of newcomers, when they grow to some size, to become member of the employers’ organisation. Most of the newcomers are as a result member of FEBEG (for example Aspiravi, Electrawinds). The two cooperatives within the group of newcomers, Ecopower and Wase Wind, have not become members. The RES newcomers, which are in fact only a sub-activity of a larger company of another sector (recycling, construction …) also do not seem to do this. FEBEG made specific efforts to socialise these newcomers in the labour regulation practices of the sector joint committee.

On the union side, we see on the one hand no global campaigns. The reason is very simple. Only a small amount of the total workforce in the sector is now employed in these small, independent RES companies. On the other hand, we can see that the unions are already active at the workplace. Aspiravi and Electrawinds have a trade union delegation at the workplace. Again, the sector unions are strongly developed. It is in other words for newcomers also important that their employees are represented, heart at this union side, which has been traditionally dominated by the union forces of the incumbents in the sector (Electrabel, SPE …).

4. Role of collective bargaining and social dialogue

4.1 Please provide information on the structure of collective bargaining in the electricity sector. Please, briefly mention the main characteristics of collective bargaining:

At what level are collective agreements within the subsectors of the electricity sector (traditional providers, newly emerging providers) concluded (company, sectoral level and/or inter-sectoral level)? Is there a difference between the producers and the distributors?

Estimate the coverage rate of collective bargaining in terms of companies and employees: are there any differences in coverage across different subsectors of electricity production?

Traditionally, the sector level has been the dominant level to arrange labour regulations in the (private part of the) sector. Joint Committee 326, covering the electricity and gas sectors, was and still is the main body for negotiations, settling disputes, and reaching collective agreements.

Coverage is 100%. The binding force of all collective agreements concluded in the joint sector committee 326 is extended by Royal Decree and so they apply to all employers and their employees of the sector concerned. The rate of coverage is therefore almost 100%. ‘Cadres’ or managerial staff) are not covered by sector collective bargaining. However, in practice these persons usually get (at least) the same wage increases as the other workers.

4.2 Please comment on the most recent collective agreements reached at sector level and at company level. Please address the following topics:

Pay and working time: level and trends relative to the national average and significant differences across subsectors of the electricity industry.

The sectoral agreement of joint committee 326 for the period 2009-2010 followed the instructions of the national intersectoral agreement of the country. Automatic wage indexation has been preserved. A wage increase – the 250 Euro fixed amount to spread over two years – has been organised in the sector by an increase of the meal vouchers. These vouchers can be used to pay in restaurants and shops where food is sold. Taking into account some criteria, these vouchers are less taxated than ‘normal’ wage. Additionally, a sectoral arrangement was developed in relation to collective bonuses. The arrangement was the implementation of the intersectoral national collective agreement 90 on these bonuses. The sector agreement was complemented with company agreements which stipulate the collective targets on customer satisfaction, participation in training, etc. . Other parts of the agreement had to do with the additional pension rights in the sector.

No recent changes have been introduced in working time. The sector has a 35.83 hours/week, which is calculated on a yearly basis. In practice, the norm is that employees work 38 hours, which are compensated with 13 holidays.

Sector negotiations for the period 2011-2012 are still on-going. A big point of debate is the creation of a sector framework on performance-based management and pay, which exist already in several companies.

4.3. Cooperation between the social partners and government

Have the government started any social dialogue or social concentration in the electricity sector since 2008? Please illustrate the features and results of any such initiatives.

Have bipartite and/or tripartite bodies dealing with specific issues of the electricity industry been created since 2008?

Have there been since 2008 any joint initiatives of cooperation between social partners to influence or steer the energy policy developed by the government in your country? Or have such initiatives been taken separately by certain social partner organisations?

Have the social partners been involved in the making of the national action plan to reach the 2020 target, or in issues aiming to secure the supply of enough electricity?

Social partners are on a regular basis consulted on energy issues in the country. This happens in the established official bodies (see supra point 1.4). No additional bodies have been created since 2008. Social partners have to a greater or a lesser extent been involved and politically active on the key initiatives:

The pricing in the electricity market

The stimulation packages for renewable energy

The nuclear monopoly of Electrabel, its market effects and phasing-out

The prospective studies on the energy mix of the country

At different levels and places, the social partners have been consulted on sub-parts of the implementation of the EU Directive on renewable energy:

4.4. Please provide information about the views of the trade unions and employer organisations on the main changes regarding employment and working conditions affecting the sector since 2008 and especially on the impact of the current crisis (for instance on employment trends, quality of jobs, working hours, wages, fixed-term employment, part-time, temporary agency work, participation in training, outsourcing, subcontracting etc.).

Crisis is not a major issue in the sector. The difficult issues in the sector social dialogue have still to do with the labour effects of the liberalisation. Since the liberalisation the sector has been confronted with two types of segmentation:

Personnel that is hired after 2003 (the liberalisation moment) works under other conditions than the personnel already working in the sector before 2003 (mainly from the incumbents Electrabel and SPE). Actors are still working on the harmonisation between the two employment statutes in the sector.

The development of retail divisions and companies created a rising segmentation in the labour conditions between the highly-skilled professional staff (marketeers and traders) and the sales personnel (working in very often outsourced call-centers or as self-employed sales agents).

5. Commentary

Social dialogue is strongly developed in the electricity sector. The still small but rising RES production and retail had until now not a major impact on this dialogue, because the majority of this production is organised by the existing producers in the sector or is organised by providers with only a very small share of the total employment. It doesn’t mean that the issue of renewable energy is not followed with high interest by the Belgian social partners. However, this happens more at the level of macro-economic policies and by the confederations at federal and/or regional level. On the hand the issue is at this level currently mainly related to the question of energy prices, business costs and purchasing power and on the other hand to the development of a succesful innovative green economy in the country.